Dispute Over Hydro Projects Continues Between India and Pakistan under the Indus Water Treaty
The Neutral Expert (NE) appointed under the terms of the Indus Water Treaty (IWT), 1960, determined that he is "competent (सक्षम)" to resolve differences between India and Pakistan regarding the design of hydroelectric projects built on the Indus Treaty rivers.
In September 2024, India announced that there would be no further meetings of the Permanent Indus Commission (PIC), composed of representatives from both countries, until the IWT was renegotiated. The last meeting was held in Delhi in May 2022.
The dispute resolution mechanism outlined under the IWT — as interpreted by India — stipulates that disputes must first attempt to be resolved by the PIC. If the PIC fails, the matter is to be referred to the World Bank-appointed Neutral Expert. If this too proves unsuccessful, the dispute would then be decided by a Court of Arbitration.
However, while India maintains that each step must be fully exhausted before moving on to the next, Pakistan has proceeded without waiting for India’s concurrence.
Initially, both countries appeared to agree on the World Bank appointing a Neutral Expert, but in 2016, Pakistan requested a Court of Arbitration. The World Bank initially ruled that having both a Neutral Expert and a Court of Arbitration simultaneously could lead to “contradictory outcomes.” However, in 2022, it facilitated the establishment of both a Neutral Expert and a chairman for the Court of Arbitration. India has refused to attend the Court of Arbitration proceedings at The Hague, arguing that the treaty does not permit parallel dispute mechanisms. Conversely, Pakistan maintains that it is acting within the treaty's framework.
While the NE is authorized under the treaty to decide on technical disputes, this does not invalidate the existing Court of Arbitration.
In the coming days, Mr. Lino, the World Bank-appointed NE, is expected to hear arguments from both India and Pakistan and decide whether the design parameters of the Kishenganga and Ratle hydroelectric projects comply with the IWT.
The treaty, which divided the six Himalayan rivers between India and Pakistan, grants India unrestricted use of the three eastern tributaries of the Indus River (Sutlej, Beas, and Ravi) while allocating the western tributaries (Indus or Sindhu, Jhelum, and Chenab) to Pakistan.
Pakistan first raised objections to India’s construction of the 330 MW Kishenganga hydroelectric project on the Jhelum River in 2006, and subsequently to plans for the 850 MW Ratle Hydroelectric Project on the Chenab River. India and Pakistan continue to differ on whether the technical details of these hydroelectric projects conform to the treaty, given that the Jhelum and Chenab are part of the “western tributaries.”